Litigation Release No. 18892 / September 22, 2004

On August 20, 2004, after an evidentiary hearing, the U.S. District Court for the Central District of Illinois ordered defendant Brandon R. Moore ("Moore") to pay $403,009.21 in disgorgement, plus $40,242.81 in prejudgment interest and a $65,000 civil penalty for his role in operating and selling investments in a hedge fund, House Edge, L.P. ("Hedge Fund"), through its adviser, House Asset Management, L.L.C. The August 20, 2004 order resolved the remaining issues against Moore. On June 20, 2002, the Court had entered a permanent injunction against Moore, with his consent, enjoining him from violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and Sections 206(1) and 206(2) of the Investment Advisers Act of 1940.

The Commission alleged in its complaint that Moore and the other defendants raised approximately $2.9 million from investors by making false statements concerning the Hedge Fund's historical returns as well as the use of investor proceeds. Additional details concerning the factual allegations and the violations charged against the defendants in the Commission's complaint can be found in Litigation Release No. 17583 / June 24, 2002.

In addition, on August 26, 2004, the Court entered a final judgment against defendant Paul J. House, III ("House"), requiring him to pay $2,914,796 in disgorgement, plus $233,291 in prejudgment interest and a third-tier civil penalty of $120,000. The final judgment followed an order of partial summary judgment entered against House on February 19, 2004. Previously, House pleaded guilty to eight counts of mail fraud in connection with his participation in this scheme and was sentenced to 96 months in a federal penitentiary.